Preliminary data published by the Federal Statistical Office (Destatis) showed that in the 2nd quarter, GDP decreased by 0.1% after growing by 0.2% in the 1st quarter. Economists had expected the economy to expand by 0.1%. Destatis said that compared with the previous quarter, there was a particular decline in investments in equipment and buildings. Details will only be released next month, and given that there are no single hard data points for the month of June available, yet, the Destatis used a model-based approach to fill the gap. As the hard macro data for the month of May looked slightly blurred by the high number of public holidays, stronger-than-expected economic growth in June may cause an upward revision of the estimate for GDP growth for the 2nd quarter.
In annual terms, GDP declined by 0.1% in the 2nd quarter after a similar drop in the 1st quarter (revised from -0.2%). Consensus estimates assumed that GDP would remain unchanged.
According to the latest forecasts by the Bundesbank, real GDP will increase by a calendar-adjusted 0.3% this year. In 2025 and 2026, the German economy will then grow by 1.1% and 1.4%, respectively.